The Washington Post Co. will help finance the testing of a new generation of portable telephones in the Washington area that proponents say could eventually put small, relatively inexpensive phones into the pockets and briefcases of millions of people.
The pilot program, expected to begin early next year, will permit up to 2,000 customers to make calls from phones from virtually anywhere within a network covering downtown Washington and some suburban areas. The phones in the test are about the size of a wallet, and look something like the hand-held devices depicted on the TV program "Star Trek."
The Washington test is one of a series of experimental "personal communications networks" that have been approved by the Federal Communications Commission in recent months. The FCC has also granted licenses to companies for tests in New York; Elmira, N.Y.; Columbus, Ohio; and Dearfield, Fla.
The Washington Post Co. will finance the test in partnership with American Personal Communications Inc., a Baltimore-based consulting and investment banking company that won the FCC's permission to operate the phone system in Washington in February.
The two-year test will cost $5 million to $10 million, with The Post Co. supplying the majority of the capital, said Wayne Schelle, chairman of American Personal Communications. However, APC will own the majority stake in the partnership, he said. The Post Co. and APC previously were partners in the launching of a cellular phone system in the Washington-Baltimore area in 1983. The Post Co. later acquired a number of other cellular franchises, but eventually sold them.
As envisioned by its backers, the new phones would ultimately be cheaper, lighter and easier to use than cellular phones, which are used primarily in motor vehicles. Schelle said the phones could cost as little as $50 to $75 with an average monthly service charge of $35 to $45. By contrast, cellular service is about $90 per month and cellular phones cost $300 to $500, he said.
The portable phone technology is similar to cellular in that it uses a series of transmitter-receivers to "hand off" a radio signal as a caller moves between overlapping coverage areas. But the transmitters used by the new technology are smaller than the cellular units and use less power, thus making them cheaper to operate. Schelle's company is seeking sites around the area for a network of about 30 transmitters, each about the size of a refrigerator, that will have a range of about one-quarter mile to one-half mile.
While proponents of this technology see a day when their portable phones ultimately will replace cellular and even cordless phones, several potential roadblocks remain. The new technology is still hampered by a scarcity of space on the radio band, said Jerry Lucas, president of TeleStrategies Inc., a McLean consulting firm. The FCC still must decide how to allocate a limited amount of transmission space.
Further, a successful test of the Washington system doesn't guarantee APC and The Post Co. the right to develop a larger system here or elsewhere, said Schelle, who estimated the business could eventually be worth as much as $500 million in the Washington-Baltimore area. However, the early investment in a system could give the partnership "pioneer preference" for an FCC license, he said.
Under the first phase of the test, callers would be unable to receive calls but would be able to place calls. Two-way communication would be tested under a second phase in late 1991.